1
Exhibit 10(e)(1)
AMENDMENT
---------
This Amendment to the Loan Agreement dated December 3, 1997, between
Core Materials Corporation, a Delaware corporation ("Borrower"), and KeyBank
National Association, a national banking association ("Lender") is made
effective this 29th day of March, 2001 (the "Effective Date") by and between
Borrower and Lender.
Background Information
----------------------
A. On December 3, 1997 Borrower and Lender entered into a loan agreement
(as subsequently modified, the "Loan Agreement") by which Lender
provided to the Borrower a number of credit facilities, including, but
not limited to a $7,500,000 revolving loan (the "Loan"), having an
original Maturity Date of November 30, 1999. The Loan is evidenced by a
Variable Rate Promissory Note dated December 3, 1997 (as subsequently
modified, the "Note").
B. The Note and Loan Agreement have been previously amended to extend the
Maturity Date to January 30, 2001.
C. Borrower has requested that the Maturity Date be extended to May 1,
2002.
D. Subject to the terms and conditions set forth herein and in the Third
Modification and Allonge to Variable Rate Promissory Note of even date
herewith and incorporated herein by reference (the "Modification"),
Lender has consented to the extension of the Maturity Date.
Statement of Agreement
----------------------
Lender and Borrower acknowledge the accuracy of the above Background Information
and hereby agree as follows:
1. AMENDMENT. The Loan Agreement is hereby amended as follows:
(a) Section 5, FEES. The second paragraph of Section 5 is hereby
deleted in its entirety and replaced with the following:
"Borrower shall also pay a fee to Lender in connection with
the Loan equal to 3/8% per annum of the unused portion of such
Loan during the previous calendar quarter commencing in the
second quarter of 2001, which fee shall be due and payable
within fifteen (15) days after receipt of an invoice from
Lender. In addition, there shall be due from Borrower to
Lender a quarterly fee of $10,000 (the "Modification Fee").
The first Modification Fee shall be due and payable at
2
the time of execution of this Amendment. The remaining
Modification Fee payments of $10,000 each shall be due and
payable as follows:
April 15, 2001
July 15, 2001
October 15, 2001
January 15, 2002"
(b) Section 11, paragraph (b) is hereby deleted in its entirety
and replaced with the following:
"(b) Borrower shall not permit its Minimum Fixed Charge
Coverage Ratio to be less than:
.75x for the first quarter 2001
.75x for the second quarter 2001
.75x for the third quarter 2001
1.00x for the fourth quarter 2001
1.15x for the first quarter 2002
The Minimum Fixed Charge Coverage Ratio shall be
tested quarterly on a rolling four (4) quarters
basis."
(c) Section 11, paragraph (c) is hereby deleted and replaced with
the following:
"(c) Not permit Borrower's Minimum Debt Service Coverage
Ratio to be less than:
.85x for first quarter of 2001
.85x for second quarter of 2001
.85x for third quarter of 2001
1.15x for fourth quarter of 2001
1.25x for first quarter of 2002
The Debt Service Coverage Ratio shall be tested quarterly on a
rolling four (4) quarters basis."
(d) Section 11, paragraph (a) is hereby deleted and the following
is hereby added as Section 11, paragraph (e):
(2)
3
"Borrower's Senior Funded Obligations to EBITDAL shall not
exceed:
5.25x for first quarter 2001
5.00x for second quarter 2001
5.00x for third quarter 2001
4.00x for fourth quarter 2001
3.75x for first quarter 2002
This ratio shall be tested quarterly on a rolling four (4)
quarters basis."
(e) Xxxxxxx 00, xxxxxxxxx (x), xxxxx (x), (xx), (xxx) and (iv) are
hereby deleted and the following definitions are hereby added:
"PPLTD" means actual principal payments on Subordinated Debt,
Long-Term Debt and any other permitted debt, excluding the
Loan, measured on a rolling four quarters basis.
"EBITDAL" means:
Net Income + Interest Expense +
Tax Charges + Depreciation/Amortization
+/- Extraordinary Losses/Gains -
Interest Income + Rent/Lease Expenses
"LONG-TERM DEBT" means any debt of Borrower for borrowed
money, including without limitation the Loan, Bonds, Capital
Leases, notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments and all
obligations upon which interest charges are customarily paid,
having a scheduled maturity date beyond the expiration of
Borrower's then current fiscal year, excluding Subordinated
Debt.
"MINIMUM DEBT SERVICE COVERAGE RATIO" means:
EBITDAL
-----------------
Interest Expense* + PPLTD + Rent/Lease Expenses
(*"Interest Expense" excludes any accrued but not paid
Subordinated Debt interest.)
"MAINTENANCE CAPITAL EXPENDITURES" mean amounts expended by
Borrower for the maintenance, repair or replacement of
equipment, machinery, fixed assets, real property or
improvements, which shall be defined as $1,000,000.
(3)
4
"MINIMUM FIXED CHARGE COVERAGE RATIO" means:
EBITDAL
-------
Interest Expense* +
PPLTD + Rent/Lease Expenses +
Maintenance Capital Expenditures
(*"Interest Expense" excludes any accrued but not paid
Subordinated Debt interest.)
"SENIOR FUNDED OBLIGATIONS" means any current portion of
long-term debt (as defined by GAAP), Long-Term Debt of
Borrower plus Discounted Present Value of the future lease
payment stream (using a 7.50% per annum rate), but excluding
Subordinated Debt.
"SENIOR FUNDED OBLIGATIONS TO EBITDAL" means:
Senior Funded Obligations
-------------------------
EBITDAL
All other accounting terms used herein and in the Loan Agreement,
unless otherwise defined, shall be construed in accordance with GAAP.
2. INCONSISTENCY. Except as modified, amended, or changed by this
Amendment, the Loan Agreement is unchanged. In the event of any
inconsistency between the provisions of this Amendment and the Loan
Agreement, the provisions of this Amendment shall control.
3. INCORPORATION. The Loan Agreement, as previously amended, is
incorporated herein by reference and all capitalized terms not
otherwise defined herein shall have the same meaning as set forth in
the Loan Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BORROWER. By execution of this
Amendment, Borrower represents and warrants to Lender that:
A. Borrower has full right, power and authority to execute this
Amendment and to perform all of its obligations thereunder;
B. Upon execution of this Amendment by Borrower and Lender, no
uncured event of default exists under the Note, Loan Agreement
or related documents;
C. Borrower reaffirms its obligation to pay the Loan in full, the
validity and enforceability of the Note, Loan Agreement and
related documents; and
(4)
5
D. Except to the extent otherwise disclosed to Lender, Borrower
affirms that all representations, warranties and covenants of
Borrower set forth in the Note and/or Loan Agreement are true
and accurate.
5. EXPENSES. Borrower shall pay or reimburse Lender, as applicable, for
all Lender's reasonable out-of-pocket expenses relating to, or
incidental with, this Amendment, including without limitation filing
fees and attorneys' fees.
6. EXECUTION. This Amendment is being executed in Columbus, Ohio, and
shall be construed in accordance with the laws of the State of Ohio.
CORE MATERIALS CORPORATION KEYBANK, NATIONAL ASSOCIATION
By: /S/ Xxxxx X. Xxxxxxx By: /S/ Xxxxx X. Xxxxxxxx
-------------------- ---------------------
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx,
Vice President, Treasurer and CFO Senior Vice President
(5)
